Magic Cauldron - Making Money From Open Source

The case for open source can be based entirely on technical and economic factors. The Open Source process of development produces code that is characterized by:

better quality

higher reliability

lower costs of production, and,

provides increased choice

Also, for hardware vendors

Nobody wants to wait six months for bug fixes -- if a user wants to fix a problem and has the ability to do it, let them

Drivers do not bring in revenue -- let someone else do your work for you; concentrate on innovation

OS will extend the lifetime of hardware beyond the point where it is economicall viable for the hardware vendor to support it

Closing source will give the worst of all worlds: your secrets will be exposed (users are smart enough), you won't get free help from users, and you won't leave your competition behind (because they are forced to innovate, they will).

Ultimately, these are the driving factors in any open society with a laissez fair economy. Politics does not have to play any role in the decision making.

Use value and Sale value

Use value of software: productivity multiplier (intermediate good)

Sale value: as a salable commodity

The factory model of software production:

Developer time paid by sale value (cost plus margin)

Sale value is proportional to development cost.

Coding practice

95% of code written in-house; only 5% sale value driven

Difficult to re-use -- customized to user organization

Maintenance work required, and takes up > 75% of a developer's time

Has little or no sale value, only use value

Price a user will pay for software determined by expected future value of vendor service

Software is a service industry under the delusion it is a manufacturing industry